A report issued by the Office of the Inspector General of the Federal Reserve (OIG) exposed continuing issues with the current remodeling of the Consumer Financial Protection Bureau headquarters in Washington, D.C. The report was requested by the House Financial Services Oversight and Investigations Committee on Jan. 29. In addition to cost overruns reported on here, the OIG reports that the required documentation authorizing the renovation are nowhere to be found, and that the a required internal review was never done.
According to the OIG’s report, CFPB officials have been “unable to locate any documentation of the decision to fully renovate the building.” The renovation of the bureau’s headquarters, originally estimated at $55 million, has increased to $145.1 million in construction costs. That total cost balloons to $215.8 million if moving expenses and rental costs are included. The renovation includes an elaborate new penthouse floor and a large indoor waterfall. Reportedly the building will cost $590 per square foot, which is more than the Trump World Tower in New York City and other world-class rental properties.
In addition to missing documents, the OIG reported that the CFPB failed to follow its own established protocols for significant expenditures. It is the published policy of the CFPB to submit plans to an internal investment review board which is tasked with reviewing estimates and suggesting alternative courses of action. The renovation was never submitted to the review board for analysis. “Without this analysis, the value of the IRB process as a funding control is diminished and a sound business case is not available to support the funding of the renovation,” the report said.
Though the renovations will continue, news of mismanagement at the CFPB promises to remain in the news. Massachusetts senator and potential Democratic presidential contender Elizabeth Warren was one of the supervisors of the CFPB from September 2010 until her resignation in August 2011, as presidentially appointed “Special Advisor.” Renovation decisions would almost certainly have occurred during her tenure since the project was formally announced in February 2011, and initial funding for had been designated by October 1, 2011, the beginning of the CFPB’s fiscal year.
In addition, Republicans in the House continue to scructinize the CFPB. “When they passed the Dodd-Frank Act, Democrats in Congress and the White House made the CFPB unaccountable to taxpayers and to Congress,” Rep. Jeb Hensarling (R-TX) said in a statement. “We’re seeing the results of this dangerous unaccountability today in a Washington bureaucracy that is running amok, spending as much as it wants on whatever it wants. It’s outrageous.”